Interest paid to a corporation established under a Central, State or Provincial Act falls within the notified exemption from tax deduction at source on interest payments. A statutory corporation established under a Central Act is therefore covered by that exemption. A CBDT circular addressing entities with unconditional income-tax exemption does not restrict or displace the separate exemption available under the notification. Consequently, no tax deduction at source is required on such interest, and the payer cannot be treated as an assessee in default or charged consequential interest.

Binding interim judicial directions requiring leave fare concession reimbursements with a foreign travel leg not to be treated as income for tax deduction purposes prevented the bank's non-deduction from constituting a default. Although such reimbursements were not substantively exempt under section 10(5), the directions placed any eventual tax liability on employees if the writ petition failed. In the absence of modification, vacation, or inapplicability of that protection, a subsequent finding on substantive taxability could not retrospectively create a deduction obligation. The bank therefore was not an assessee in default under section 201(1), and consequential interest under section 201(1A) was not leviable.

Cash-deposit addition under the unexplained-credit and special tax-rate provisions requires merits adjudication where an earlier appeal was to be treated as ineffective only upon merger with a later appeal, but neither merger nor substantive examination occurred. The appellate authority must examine the addition after giving the assessee a reasonable opportunity of hearing. No conclusion was reached on either the validity or merits of the addition.

Revisionary jurisdiction requires an assessment order to be both erroneous and prejudicial to Revenue. Relevant inquiries and documentary evidence concerning continuing business expenditure after transfer of stock, property-related indexed improvement costs and capital loss, and fixed-asset reclassifications support a permissible assessment view. Expenditure connected with retained liabilities and continuing income activities cannot be split solely by the transfer date; revenue neutrality also negates prejudice. Internal branch transfers of existing assets at book cost do not constitute fresh acquisitions. Revision cannot rest merely on a preference for another view after adequate inquiry.

Valid exercise of the statutory option by furnishing Form No. 10-ID within the prescribed time makes the option applicable to subsequent assessment years and irrevocable. Nil income or no tax computation under the concessional regime in the first eligible year does not itself withdraw or cancel that option. However, the continuing option does not independently establish entitlement to the concessional tax rate. Eligibility remains subject to verification of the substantive conditions applicable for the relevant year. Continued availability of the option and entitlement to concessional tax treatment are therefore distinct matters.

Retirement leave encashment of Rs. 8,90,808 falls within the enhanced Rs. 25 lakh exemption ceiling under CBDT Notification No. 31/2023 for section 10(10AA) of the Income-tax Act. Applying the former Rs. 3 lakh ceiling is inconsistent with the enhanced limit. Exemption remains conditional on verification of the amount actually received and satisfaction of all applicable statutory requirements.

Royalty and fees for technical services payable to an associated enterprise are benchmarked at 1.9% of net sales under the unilateral advance pricing agreement methodology, rather than nil or 2%. Omission of the provision covering expenditure with specified related parties from specified domestic transactions, effective 1 April 2017, precludes a transfer-pricing adjustment for manufacturing activity founded on that provision for the relevant assessment year. Taxable income must therefore apply the 1.9% royalty and technical-service rate and exclude the manufacturing adjustment.

Penalty for under-reporting or misreporting is not leviable where an inadvertent omission to add back a tax provision in computing book profit is corrected, and tax is ultimately assessed and paid on the higher deemed income under the minimum alternate tax provisions. Because the book-profit adjustment was made, the normal-computation omission caused neither tax evasion nor revenue loss. The applicable departmental circular and the penalty principle governing tax determined on book profit support non-levy of penalty under Section 270A of the Income-tax Act, 1961.

Co-operative credit societies that are not themselves co-operative banks may claim deduction under section 80P(2)(d) for interest from investments and deposits with co-operative banks, treated as other registered co-operative societies. The exclusion in section 80P(4) applies to a claimant that is a co-operative bank and does not bar such a society because the payer is a co-operative bank. Interest on nationalised-bank deposits qualifies as business income under section 80P(2)(a)(i) where deposits support liquidity requirements, members' fund protection, multi-location operations, and the conduct of credit facilities, rather than representing surplus funds parked outside the business.

Rule 8D(2)(ii) machinery computation for Section 14A disallowance of expenditure relating to exempt dividend income is confined to investments that yielded dividend income in the relevant year. Unlisted securities that generated no dividend income cannot be included in the average value of investments for that computation. Including such non-yielding investments makes the further disallowance unsustainable.

Assessments under the combined scope of Sections 143 and 147 need not follow the best-judgment procedure merely because books of account are unavailable. Where the taxpayer fails to produce books and supporting records despite opportunity, and reported expenditure changes are grossly disproportionate to turnover growth, taxable income may be determined using industry-standard income and profit parameters. Non-rejection of returns or profit-and-loss accounts does not, by itself, invalidate that assessment approach.

Amended Section 270AA, substituted with effect from 1 March 2026, permits waiver of penalties already levied, including penalties for under-reporting arising from misreporting of income, where statutory conditions are met, including payment of prescribed additional income tax. Upon fulfilment of those conditions and expiry of the appeal period, waiver is mandatory under Section 270AA(3), with immunity from proceedings under Sections 276C and 276CC. A fresh application may be filed within one month from the end of the month in which the assessment or reassessment order and penalty order are received. Rejection of an earlier application under the pre-amendment framework does not bar this post-penalty application.

Section 250(6A) of the Income-tax Act contemplates, where possible, disposal of appellate proceedings within one year from the end of the financial year in which an appeal is filed or transferred. Departmental priority categories cannot displace that statutory framework where first appeals remain undecided despite assessees' compliance with notices. The High Court required the National Faceless Appeal Centre appellate authority to decide the pending appeals within three months after providing proper and reasonable hearing opportunities.

Additional depreciation is available for qualifying new plant and machinery acquired and installed after the prescribed date by an assessee engaged in manufacture or production. Generation of electricity through captive and wind power plants constitutes production because electricity is movable property capable of transmission, transfer, delivery and possession; machinery used to generate such power for manufacturing operations can therefore qualify. Revisionary jurisdiction requires an assessment order to be both erroneous and prejudicial to Revenue interests. Where the depreciation claim is legally allowable and correctly accepted, neither condition exists, so revision cannot displace the assessment.

Tax deducted at source from salary cannot be recovered again from an employee-deductee where the employee establishes that the employer deducted it, even if Form 26AS does not reflect deposit or correct reporting. Although TDS credit is linked to payment to the Central Government, direct recovery is barred to the extent tax was actually deducted; the defaulting employer-deductor may be treated as an assessee in default. The competent authority must verify reliable evidence of deduction, obtain or summon employer records where necessary, and rectify or amend the resulting tax demand when the claimed deduction is established.

Proceedings under section 153A were based on an approval under section 153D described as vitiated by total non-application of mind. The Supreme Court dismissed the special leave petitions under Article 136 and declined to interfere with the High Court order concerning the validity of those proceedings. The High Court order therefore remained undisturbed.

Validity of an order under section 148A(3) and a same-day reassessment notice under section 148 arose alongside assessment proceedings under section 143(3) read with section 263 that followed the reopening notice. The dispute also concerned an addition under section 56(2)(x), based on sale consideration below the stamp duty valuation in the sale deeds. The Special Leave Petition was dismissed, with no interference under Article 136.

Reassessment concerning capital gains from the sale of shares raised the question whether reopening was founded on a change of opinion. The Supreme Court found no good ground to interfere under Article 136 of the Constitution and dismissed the special leave petition, leaving the impugned judgment undisturbed. The disposal did not set out any separate reasoning on the substantive reassessment issue.

Educational-service exemption under Entry No. 66(a) covers fees charged by an educational institution to its students for diploma and certificate programmes that form part of a curriculum leading to a qualification recognised by law. Statutory power to institute, regulate and prescribe approved courses, curricula and syllabi supports recognition of qualifications awarded through those programmes. The exemption applies to diploma and certificate programmes of one year or more; short-duration programmes or participation certificates remain outside its scope.

Composite supply of milling, micronutrient fortification and packaging of Government-supplied food grains for Public Distribution System delivery is eligible for GST exemption where the services are naturally bundled and the goods component does not exceed 25% of total supply value. Milling is the principal supply, while fortification and packaging are ancillary. Public Distribution System distribution constitutes a function entrusted to a Panchayat. The goods-value condition must be assessed on the facts and agreed consideration, including non-cash consideration. If the goods component exceeds 25%, the exemption does not apply and GST is chargeable at 5% on total consideration.